Correlation Between Ingenic Semiconductor and Jinhui Mining

Can any of the company-specific risk be diversified away by investing in both Ingenic Semiconductor and Jinhui Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ingenic Semiconductor and Jinhui Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ingenic Semiconductor and Jinhui Mining Co, you can compare the effects of market volatilities on Ingenic Semiconductor and Jinhui Mining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ingenic Semiconductor with a short position of Jinhui Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingenic Semiconductor and Jinhui Mining.

Diversification Opportunities for Ingenic Semiconductor and Jinhui Mining

0.38

Correlation Coefficient

Ingenic Semiconductor  Jinhui Mining

Weak diversification

The 3 months correlation between Ingenic and Jinhui is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ingenic Semiconductor and Jinhui Mining Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jinhui Mining and Ingenic Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ingenic Semiconductor are associated (or correlated) with Jinhui Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jinhui Mining has no effect on the direction of Ingenic Semiconductor i.e., Ingenic Semiconductor and Jinhui Mining go up and down completely randomly.

Pair Corralation between Ingenic Semiconductor and Jinhui Mining

Assuming the 90 days trading horizon Ingenic Semiconductor is expected to generate 1.84 times more return on investment than Jinhui Mining. However, Ingenic Semiconductor is 1.84 times more volatile than Jinhui Mining Co. It trades about -0.01 of its potential returns per unit of risk. Jinhui Mining Co is currently generating about -0.08 per unit of risk. If you would invest  7,790  in Ingenic Semiconductor on October 1, 2024 and sell it today you would lose (461.00) from holding Ingenic Semiconductor or give up 5.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ingenic Semiconductor  vs.  Jinhui Mining Co

Ingenic Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingenic Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ingenic Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jinhui Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jinhui Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ingenic Semiconductor and Jinhui Mining

The main advantage of trading using opposite Ingenic Semiconductor and Jinhui Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingenic Semiconductor position performs unexpectedly, Jinhui Mining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jinhui Mining will offset losses from the drop in Jinhui Mining's long position.

The idea behind Ingenic Semiconductor and Jinhui Mining Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.